Congressional LIBOR school

By MJ Lee

07/13/12 07:18 PM EDT

The House Financial Services Committee will get a private tutorial next week on the LIBOR scandal a day before Federal Reserve Chairman Ben Bernanke is expected to be pressed by lawmakers about the central bank’s role in overseeing Wall Street giants being investigated for possibly manipulating the benchmark interest rate.

Reps. Spencer Bachus and Barney Frank, the committee’s top Republican and Democrat, have set up a July 17 briefing for staff with the Congressional Research Service, according to a memo obtained by POLITICO that was circulated Friday to members of the Financial Services Committee.

Bernanke will testify before the committee on July 18 in a regularly scheduled hearing on monetary policy.

Some liberal lawmakers have privately been agitating for a separate hearing focused solely on the rate setting scandal instead of simply being given an opportunity to quiz officials when they come before the committee for other business.

According to a Democratic lawmaker, Rep. Maxine Waters (D-Calif.) had started to circulate a letter demanding a hearing on LIBOR but she was encouraged not to send it to Bachus and Frank.

The decision to at least temporarily forego a hearing comes as allegations of international banks manipulating the LIBOR benchmark interest rate hit Washington, D.C., this week. A newly released memo revealed that Treasury Secretary Timothy Geithner had expressed concerns about the problem as far back as 2008 during his tenure as president of the New York Federal Reserve.

The memo, sent to the head of Bank of England, Mervyn King, Geithner had made recommendations on ways to “improve the integrity and transparency of the rate-setting process.”

Last month, London’s Barclays bank was fined hundreds of millions of dollars for its involvement in the scandal, leading to the resignation of its CEO Bob Diamond.